Terraform Labs CEO Do Kwon believed to be arrested in Montenegro

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  • A person suspected to be Terraform Labs CEO Do Kwon has been arrested in Montenegro, according the country’s interior ministry and press reports.

A person suspected to be Do Kwon, founder of the Terra blockchain that collapsed in spectacular fashion last year, has been arrested in Montenegro, according to the country's interior ministry and press reports.

The ministry said in a tweet that two South Korean citizens, including Kwon, were apprehended over criminal charges related to document forgery after trying to board a flight to Dubai with false Costa Rica travel documents. Their initial entry into Montenegro had not been registered. 

"A warrant has been issued for them by NCB Seoul-Korea, due to the criminal offense of criminal association," the ministry said.

Yonhap reported earlier in the day that police were awaiting a reply from local authorities in Montenegro after requesting fingerprints for final identification. The report followed an unverified tweet attributed to Montenegro's Minister of Interior Filip Adzic that said a person suspected to be Do Kwon had been arrested at the airport in the capital city of Podgorica.

Bloomberg News reported later in the day that a federal grand jury in New York charged Kwon with eight counts including securities fraud, commodities fraud and wire fraud. 

TerraUSD, the stablecoin created by Terraform Labs and often known by its ticker UST, collapsed in May 2022, wiping out tens of billions of dollars for investors. The incident was the first of a series of crises to hit crypto markets over the course of 2022, including the bankruptcies of crypto lender Celsius and exchange giant FTX. A South Korean court issued an arrest warrant for Kwon, a Korean national, in September, saying he breached capital markets laws. 


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Korean prosecutors reportedly traveled to Serbia, which borders Montenegro, in February in an effort to track down Kwon. 

Separately, the U.S. Securities and Exchange Commission brought civil charges against Kwon last month, accusing him of failing to "provide the public with full, fair and truthful disclosure as required for a host of crypto asset securities."

(Updates to add tweet from interior ministry in second paragraph and Bloomberg report in fifth paragraph. With additional reporting from Yogita Khatri.)

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Authors

Inbar is a reporter covering crypto policy and regulation with a focus on Europe. Before The Block, she worked with several publications in Brussels including The Parliament Magazine and Are We Europe. Inbar holds a bachelor's degree in international relations from University College Utrecht and a master's degree in international politics from KU Leuven.
Andrew Rummer is executive editor for The Block Pro, based in London. He was previously managing editor at Bloomberg News and led special projects at Finimize. He has a degree in engineering from the University of Oxford. Follow him on Twitter at @AJRummer.


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